Thursday, January 24, 2013

Raging
Against Possible AIG Lawsuit; JPM Personnel Changes Continue - (www.americanbanker.com) Seriously, AIG?: We had
a feeling the Internet was going to let out a collective groan once the news
that AIG was considering a lawsuit against
the federal government over its $182 billion bailout was picked up by news
outlets and made the rounds on Twitter. (To summarize, the firm is being asked
to join a suit originally launched by former CEO Maurice Greenberg, who claims
the terms of the bailout were too harsh and deprived shareholders of billions
of dollars.) And, oh, what a collective groan it was. "AIG, bailed out by
U.S., may now sue U.S., claiming bailout terms were too harsh. We should
counter-sue for stupidity," Berkeley professor and former U.S. Secretary
of Labor Robert Reich tweeted with a link to an article from
ABC news explaining the potential suit.
"AIG considers suing government for bailing it out, world implodes in on
itself," one Washington Post headline reads.
Blogger Andrew Borowitz penned a satirical letter from AIG to the taxpayers for
the New Yorker. (Sample line: "by suing … we are standing up for one
of the most precious American rights of all: the right to sue someone who has
just saved your life.") And David Weidner from MarketWatch goes so far as
to suggest the government retaliate by charging AIG with treason.

Short
sales in California surpass sales of foreclosed homes - (www.latimes.com) In recent months, short sales
have surpassed sales of foreclosed homes in California for the first time since
the start of the housing crash in 2007, data show. When housing prices first
went off the cliff, most mortgage lenders refused to cut deals with homeowners,
choosing instead to repossess homes on a grand scale. Five years and billions
of dollars in losses later, many banks can't cut those deals fast enough,
writing off large chunks of mortgage debt and even paying homeowners to move
out. In recent months, short sales — in which banks allow homeowners to sell
for less than they owe — have surpassed sales of foreclosed homes in California
for the first time since the start of the housing crash in 2007, according to
real estate research firm DataQuick. The transactions now represent about a
quarter of the market, a surge driven by rising home prices, government
crackdowns on foreclosures and banks' increasing capacity to process the deals.

Greek
Banks to need more money for their recapitalization - (www.ekathimerini.com) Surprise, Surprise!!!The country’s main banks are considering requesting additional
funds for their recapitalization. Senior bank officials say that the rapid
deterioration in financial conditions caused by the back-to-back elections in
mid-2012 has led to a greater increase in nonperforming loans than originally
foreseen in the BlackRock report a year ago. They add that banks should proceed
to greater share capital increases in order to respond to the new reality. Ernst
& Young estimates that nonperforming loans in Greece approached 24 percent
of all loans at the end of 2012.

Morgan Stanley Said to Cut 1,600 Investment-Banking Jobs -
(www.bloomberg.com) Morgan Stanley, the sixth-largest U.S. bank
by assets, plans to eliminate about 1,600 jobs from its investment bank and
support staff in coming weeks, a person familiar with the matter said. The cuts
total about 6 percent of the New York-based company’s institutional securities
group, which includes investment banking and trading units, and support staff,
the person said, asking not to be identified because the decision hasn’t been
made public. About half the reductions will be in the U.S., the person said. Morgan
Stanley reduced its staff by about 4,200 people in the first nine months of
last year through job cuts and unit sales, after saying in December 2011 it
would eliminate 1,600 jobs. Chief Executive Officer James Gorman, 54,
has pledged to lower costs as return on equity remains below the bank’s cost of
capital.

The California Social Contract
(redux) - (www.ochousingnews.com)
You fence-sitters are failing
to fulfill your part of the California Social Contract. Your failure to
continue buying homes is disrupting the social order, and it is causing those
of us who bought before you psychological, emotional and financial damage. It
is time for you to get off the fence and buy–NOW!!! In any social contract, you
give up something personally for the greater good. When those of us who bought
before you purchased our homes, we had to commit unrealistic percentages of our
income to housing, lie on mortgage applications, and take out financing on
unstable mortgage terms in order to do our part for the continuing social good.
We made these sacrifices willingly because the benefits of maintaining the
social contract are worth the price we paid.